Divvy Wants to Make Rent-to-Own Deals Easy. Many Customers Find Them Hard.

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“With mortgage rates at all-time highs, our mission is more critical than ever,” Adena Hefets, the chief executive and a founder of Divvy, said in a statement. “Divvy gives renters the power of ownership: Pick out a home, build savings, and have the option to make it your forever home.” But Divvy’s mandatory savings plan also means that renters have a far higher monthly outlay compared with customers of other rent-to-own firms. The higher payments have become a struggle for some customers, especially because of rapid inflation. In the Atlanta area, where it owns about 1,100 homes, Divvy has filed 190 eviction actions so far this year, according to a data analysis by the Private Equity Stakeholder Project. In 2022, the company filed 184 evictions in the Atlanta area. Divvy said many of those filings did not result in completed evictions. But it acknowledges that the number of completed evictions in the Atlanta area is higher than it was a year ago because the company now owns more homes there. The company, which charges a 5 percent fee for late payments, said it evicted only as a last resort. The company also said it had taken steps to address customer complaints about repairs. This spring, Divvy said, it put in place a new system to prioritize maintenance requests, including a 24-hour hotline for customers. In April, Divvy also told renters that it would waive one late fee a year on a delinquent payment, apparently in recognition that the higher monthly charge because of its forced savings model is causing some hardships. The Fretts, who are both employed, moved into the Georgia home in May 2022. They said they had been referred to Divvy by a real estate broker who worked closely with the company. At the time, the couple said, they were living in the U.S. Virgin Islands, so they relied on Divvy’s recommended home inspector to tell them if the house passed muster.